By Stelios Orphanides
DEPOSITS in the Cyprus banking system fell 0.7 per cent in August to just over €46bn compared to the month before, and 4.3 per cent compared to a year ago as both deposits held by households and non financial companies continued their downward trend, the Central Bank of Cyprus said.
The drop in deposits last month, which followed an increase in July, prolongs a downward trend triggered in October 2012 when negotiations with the troika on Cyprus’s bailout were dragging on and exacerbated in the first half of last year after the Eurogroup and the Cypriot government agreed on the terms of the bailout, central bank data showed.
Total household deposits fell 0.6 per cent last month from July to €27bn, while companies saw their deposits fall 1.4 per cent to €11.3bn, the central bank said in a statement on its website on Wednesday. Deposits held by other financial organisations rose 0.2 per cent to €5.5bn, while those of insurance companies and pension funds fell 0.1 per cent to €2.1bn.
The government, which must await a Eurogroup decision for the release of the next bailout tranche following a deadlock caused by the September 6 parliament vote on the foreclosure bill, saw its deposits held at private banks fall to €358.5m, which translates to a monthly 1.4 per cent, the statement said.
The decrease in deposits by non-financial companies in August resulted mainly from a monthly 3.3 per cent slump to €5.1bn in the amounts held by companies domiciled in non-euro area countries, according to the central bank.
Loans extended by Cypriot banks rose 0.2 per cent in August compared to July to €60.3bn, the central bank said.